Foresight CEO Jeanette Jackson’s latest report from COP26 is focused on finance and a Canadian’s bold global plan to change the role financial institutions play in the net zero transition.
Day 3 was Finance Day at COP26, and one Canadian was front and centre. Former Bank of Canada head Mark Carney has taken on the daunting yet opportunistic task of UN special envoy on climate action and finance. The job? Find more than $100 trillion from the global financial community to drive the transition from fossil fuels to clean energy. Small wonder he calls this a “mammoth transition”! It is the largest shift in the financial sector…. ever?!
Carney announced the Glasgow Financial Alliance for Net Zero on Wednesday, a plan that has the commitment of 450+ firms including Canada’s five big banks, and has already surpassed the expected $100 trillion in commitments. And while this announcement should get so many of us in the fight against climate change excited, here are some reflections from Finance Day:
- There’s nothing like a crisis to drive action. The IPCC report released in August confirmed our worst fears about the climate crisis. But it spurred action, drawing in global leaders like Mark Carney.
- This is big money! $130 trillion has been committed from the global financial community (leave it to Mark Carney to exceed expectations).
- There are still many questions outstanding when it comes to what was referred to as the “plumbing” of new financial models. We need to rewire the financial system to align to net zero. This includes reporting, risk analysis, and standardization.
- Bonds, bonds, and more bonds. Green bonds seem to be a staple most financial leads are comfortable with. We also saw some blended finance conversations lightly approached. This is great as a validator to one of Foresight’s concept programs, the Cleantech Open Innovation Network (COIN), a progressive catalytic blended finance model exactly for cleantech investments in Canada.
- Carbon credits matter and the average price of carbon today is still $3 per tonne. I must have missed that in previous readings, but that is absurd. To encourage the cleantech adoption needed to address global emissions, industry experts and global leaders alike recommend a global average of $75 per tonne. With all of the right people in the room, let’s make that happen TODAY.
- Really, how is this money really going to be deployed? From what was presented, it looks like access to funding will be through standard rates and terms. Will this ensure the small companies, small communities, and other traditionally underrepresented stakeholder groups will have equal access to the $130 trillion?
- In a room with so many leaders and decision makers, there still seemed to be a large percentage who lack confidence and understanding on how this is all really going to play out. Executives in bright green ties or carrying bright green suitcases , and reading verbatim from prepared notes are not going to drive the meaningful change needed. We need action, not another PR stunt. We need global leaders who will take the time to internalize and understand the complexities of climate change and be able to speak about it from the heart, (and I mean all members of each government, not just the climate figurehead).
I applaud Mark Carney for this step with the financial sector. I did, however, leave the conference today encouraged but wondering, where is the heart in all this? Do the finance people have to stick to facts and figures to make their case? Like a lot of people, I’m driven by facts and passion. Let’s not forget about the value of tapping into hearts as well as minds. More on this later….